PROTECTING YOUR SECURITY & PRIVACY: Handy Tips On Gift Cards

BY JOHN FEATHERMAN/ By the time you are reading this, Christmas will be over, and you may be pondering what to do with the various gift cards you received. Do you use them immediately â€“ whether you need something or not â€“ so that you donâ€™t have to worry about expiration dates? Do you stockpile them, and use them for a rainy day? Do you â€œregiftâ€ them, and give them to someone else? Do you sell or trade them (yes, there are outlets for doing that)?

NEW FEDERAL PROTECTIONS FOR GIFT-CARD USERS

Before you make your decision, you should be armed with the law regarding gift cards. New rules for gift cards went into effect on Aug. 22, 2010 â€“ designed to protect consumers. Here is a summary of the three primary components.

First, money on a gift card canâ€™t expire for at least five years from when the card was purchased or from the last time any money was loaded onto the card. If the expiration date listed on the card is earlier than these dates, the money can be transferred to a replacement card at no cost.

Second, the expiration date of a gift card must now be clearly disclosed on the card, and any related fees must be clearly disclosed on the card or its packaging.

Third and finally, inactivity fees can only be charged if the card has not been used for at least a year, and you can only be charged once a month. However, you can be charged a fee to buy the gift card or to replace a lost or stolen card.

SPECIAL PROTECTIONS IN PENNA.

Under Pennsylvania law, businesses have to report unredeemed gift cards to the Pennsylvania Treasury two years after their expiration date, or if they only have service fees, but no expiration, five years after the date they were issued. Gift cards with no expiration date and no service fees are not reportable to the Pennsylvania Treasury.

What does this mean for you? It means you should search today to see if you have any unclaimed money due to you. Itâ€™s easy to do, and the Pennsylvania government spends your taxpayer dollars to advertise the website, so you might as well use it! The website is http://www.patreasury.gov/unclaimedproperty.html.

2 DIFFERENT KINDS OF GIFT CARDS

There are primarily two different kinds of gift cards. â€œRetailâ€ gift cards can only be redeemed at the retailers and restaurants that sell them. â€œBankâ€ gift cards â€“ which carry the logo of a payment card network such as American Express, Discover, MasterCard or Visa â€“ can be used wherever the brand is accepted.

TIPS FOR BUYING GIFT CARDS

Do your homework before you purchase. Purchase from a reliable source. I will give you advice that runs counter to conventional wisdom: You can include online auction sites â€“ but only if the website offers a full money-back guarantee if the card was counterfeit, stolen, or doesnâ€™t include the amount of the purchase. Read the fine print before you buy, so you are aware of the fees and conditions.

With retail cards, consider the financial position of the merchant. If the company closes for whatever reason, the card could be worthless.

TIPS FOR USING GIFT CARDS

When you get the card, check for terms and conditions. Also, verify the amount with the merchant or bank. If you have an iPhone or another smartphone, itâ€™s a good idea to take a photo of the front and back of the card â€“ particularly if you lose the card or left it at home. If youâ€™re making a purchase online, the photo will provide you with all the information you need to make the transaction. Keep your balance updated in a â€œnotesâ€ file on your smart phone.

PARTING ADVICE

There are websites where you can buy, sell or trade gift cards. There are too many to list here, but suffice it to say you want to read independent reviews online to determine which websites are best for you. Some sites do not offer guarantees, and you should steer clear of such sites.

Itâ€™s a good idea to also check out their rating with the Better Business Bureau, which you can do free online at http://www.bbb.org.